Which of the following is a major draw-back to sole proprietorships?

Question

Quizplus · Accepted Answer

A) The owner of a sole proprietorship is personally liable for all business debts and obligations. In the case of legal action, the owner's personal assets may be at risk.

B) There is no evidence to suggest that sole proprietors are more likely to be audited than other business entities. However, since the owner is solely responsible for all financial aspects of the business, there is a greater chance of errors and inconsistencies that may raise red flags during an audit.

C) Since the business is tied to the owner, there is no assurance of continuity in the event of the owner's death or retirement. This can make it difficult to obtain financing or sell the business.

Which of the Following Is a Major Draw-Back to Sole